A Point of Sale (POS) system is used by retailers to manage their shops.

The POS System

Hardware: The Physical Backbone

Every POS system includes hardware components that facilitate transactions. Common examples include:

• Terminals: Countertop units or mobile tablets are used to process sales.
• Barcode Scanners: Quickly identify products and prices.
• Receipt Printers: Generate paper or digital receipts for customers.
• Cash Drawers: Secure storage for cash transactions.
• EFTPOS Machines: Widely used in Australia to process card payments efficiently.

Software: The Brains of the Operation

The software component powers the functionality of a POS system:

Sales Processing

Inventory Control

Tracks stock in real time. This enables retailers to monitor their stock.

Customer Relationship Management (CRM)

Stores customer data to build loyalty programs.

Reporting and Analytics

Provides insights into sales trends and staff performance.

How POS Systems Transform Aussie Retail

Streamlined Operations

POS systems automate many manual tasks, allowing businesses to operate more efficiently:

• Automatically adjust stock levels after each sale.
• Generate detailed reports for financial tracking and decision-making.
• Process payments.

Data-Driven Decision Making

Gets the retailer information that helps them make better decisions:

• Identify top-selling products to optimise inventory.
• Identify dead stock For example, a Melbourne newsagent discovered that 20% of his stock, using this insight from their POS system, was dead and not selling.
• Analyse peak trading hours for better staff scheduling.
• Track customer purchase behaviour to tailor promotions.

Enhanced Customer Experience

Modern POS systems improve the shopping experience by:

• Reducing queue times with faster checkouts.
• Offering personalised recommendations based on purchase history.
• Managing loyalty programs seamlessly.

Real-World Benefits from Our Users

The Future of POS in Australia

As we move forward, POS systems will become even more integral to retail success:

Omnichannel Integration

The shop will need to be connected to the internet

AI-Powered

AI is already investigating many aspects of the shop. We feed information from a POS System into AI to investigate improving shop layouts, inventory, marketing strategies, etc.

Cashless society

It is only a matter of time before Australia becomes a cashless society

Cryptocurrencies

With bank fees the way they are now, it is only a matter of time before we see a growing movement to crypto.

Conclusion: Empowering Australian Retail

A POS system is an investment in your future retail business.

Explore our top POS System, which has been used in thousands of stores Australia-wide for over 40 years.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

A significant shift has occurred in our POS market—one of our long-standing competitors, Tower System, was just sold. I'll wait for the formal announcements before commenting in detail.

This latest acquisition continues the trend in Australia of our local Point-of-Sale (POS) software industry being taken over by large American companies.

Forty Years of Industry Change

This latest market movement brings to mind a pivotal industry meeting from twenty years ago. Six of us were there, representing different POS companies, and we were all passionate about the future of the news-agency industry. It's pretty sobering to realise that I am the only one still active in the industry from that group. All the others have passed on; I am the last one left. It's particularly deep as I have known this guy for almost 45 years. 

The Complexity of Market Consolidation

What's particularly interesting about this recent acquisition is the overlap the acquiring company already has in the market segments of the company it just brought. I also made an offer, but I did not offer enough.

Market Overlap Analysis

This acquisition is notable for this crucial reason: the acquiring company already has a strong presence in many of the target company's market segments, e.g., e-commerce, convenience stores, retail, non-profits, grocery, liquor, and pet supplies, so the acquiring company will face critical strategic decisions based on my experience with similar acquisitions. They'll need to evaluate which market segments to prioritise and which ones to streamline.

Final Thoughts

While I am the last one standing from that meeting 20 years ago, what I do know then as now is that the fundamentals of good service and understanding your market always stay in style.

One of our competitors has announced the release of what they call a "first" for Australian retailers: self-checkout point-of-sale (POS) software. Now, that is a bit of a tall claim. Our company and several others have already developed and provided Self-checkout POS software for local businesses years ago. Click here, and you will find a few. They are also commonly used in restaurants, and I would suggest all restaurants look into it. So their announcement may help bring this technology to the forefront of our market.

Now would be a good time to objectively review the pros and cons of self-checkout systems in most retail stores. While the technology functions as intended, like any such solution, some strengths and limitations exist. I hope here to give you a balanced look at these systems' opportunities and challenges from someone who has had experience with it, to help you make informed decisions about the realities of this Retail technology.

Now self-checkout kiosks are staples in major supermarket chains with mixed reactions. To many of us now, scanning our own groceries has become routine with such systems in supermarkets. These retail giants tout the efficiencies gained from their lower staffing needs as they have replaced rows of cashiers with a handful of overseers profiting from payroll savings. This formula works for such high-volume big-box players. But does it translate to other stores? Well, clearly not. Many large shops that could afford them do not use them. Like everything, it has its pluses and minuses.

Supermarkets Consider the Self-Checkout Scene

Let's review the standard supermarket setup:

• Goods being sold are simple to process.
• Stations are typically placed with 6-20 kiosks and 1-2 attendants overseeing the usage
• Shoppers scan and bag their own items, then pay via machine interfaces
• An attendant assists with errors, problem items and customer confusion
• 1-2 manned checkout lanes are still staffed for shoppers wanting personal service

So, we are looking at a typical setup of 2 manned checkouts and eight kiosks. In a large supermarket, with one employee monitoring eight self-checkout machines. I have seen figures showing the savings of three traditional cash register operators. So, we are looking at five manned checkouts or this setup with a labour cost of three people. So they saved two salaries, instead of five people they can get by with three.

Challenges for retailers

1. Transaction Volume Variations

For a self-checkout setup to be successful, a high volume of transactions is typically required. The business model of supermarket self-checkout terminals works because they are processing many sales each day due to the scale of their operations. Implementing a similar system for stores with lower transaction volumes may make achieving a good return on investment difficult. You would likely need significant customer traffic to properly justify the costs of installing and maintaining multiple self-checkout lanes. Smaller-scale operations may find it challenging to reach the level of sales needed over time to offset the initial investment required for this automated checkout solution.

2. Staff Role 

Self-service kiosks present some challenges and require a technically proficient person to maintain them properly. Issues are likely to occasionally arise with these automated systems, necessitating someone with strong technical skills to identify problems and resolve any issues. Without proper ongoing support and maintenance from a knowledgeable staff member, self-checkout kiosks risk developing technical problems, which would impact your customer experience if not promptly addressed.

Often, you need the services of an IT professional on call.

3. Physical Store Size Constraints

Although each of these kiosks uses less space than a manned checkout, the station with many kiosks and a person monitoring them does need a lot of space. 

4. Cost

The upfront cost of each self-checkout kiosk is higher than a traditional manned checkout station. Many automated checkout systems also require costly ongoing maintenance and after-sales support plans.

5. Shop Theft

Experience has shown self-checkout kiosks have higher shoplifting rates than manned checkout lanes. Without a staff member directly monitoring each transaction, customers can easily underreport items or bypass scanning certain products. Cameras help, but only a little.

6. Products

You need to market products that are easy to handle, scan, and bag. We found in newsagents that large cardboard was a pain. Many products need to be extremely detailed and properly programmed into your POS Software to function with these machines; for example, the item's weight often needs to be in it.

7. Customer Confusion

Some customers hate them. You are not going to get out of a human cashier somewhere. Plus, when the kiosks work, they are great, but it can be a real pain to get it right when they play up. It takes time for your customers to get used to it.

8. They break down 

When you are in a supermarket with a station of eight kiosks, if one plays up, it's okay. You have seven more working. If you only have one, well, it's a problem.

9. Foreign language support

Our kiosks had a great selling point: they could report in a foreign language, which works great in theory for a customer who knows that language. For the people monitoring the kiosk, it proved a problem when they tried to help. A kiosk with Thai letters and instructions is almost impossible for a non-Thai speaker to use. 

Conclusion

While self-checkout kiosks have become commonplace in large supermarkets, their feasibility for other retailers, as shown by their slow adoption, shows they are not yet for most retailers.

Now, before I sound so negative, if you have an interest in such technology, please let us know; one shop that works well now in small business with them is restaurants.